Don’t Get Ripped Off by Your Real Estate Agent

Check these snippets of advice -
  • Agents often betray sellers:
    One of the biggest complaints about agents is that they seem to work for the buyers, rather than the sellers. The agent is concerned with completing a deal so they can get a commission. If this means lowering the seller’s price to complete, then a lot of them have no compulsion to do this.

    By doing so, incompetent agents are betraying their sellers. Sometimes agents will openly tell buyers that the home is overpriced or that the sellers are desperate to sell because they have bought another property, or similar.

    Many agents talk behind seller’s backs and in effect betray them.

  • Some say Auctions benefit Buyers more than Sellers
    Many people have been burned at auctions because they have not reached the price that the agent had almost guaranteed would be obtained. The agent really is not that concerned because the commission on a reduced price is not much less than the commission on the price the seller is seeking. In essence, the auction tends to be more of a buyer’s market than a seller’s.

  • Price you get at auctions not necessarily the highest:
    The problem with auctions sometimes is that the price received by the seller from the final bidder is not necessarily the price the bidder was prepared to go to. The price may be above the reserve price the seller wanted, but depending on the number of other people bidding, pushing up the bidding price, reaching the best price for the seller comes into question. A buyer may have a price that is the highest they will go to at the auction. The auctioneer starts the bidding off at a low price.

    There are a few people bidding and finally the reserve price is met. The auctioneer then advises that the property is on the market. There may be two or three bidders who then become active in bidding and the price increases. Finally, only one bidder is left and they end up with the property.

    More often than not, the final bidder will remark to the agent or to someone else that they were prepared to go much higher because their highest price was more than the final bidding price. In effect, auctions deprive sellers of the best price. You have to watch this principle.

  • Watch buying at auctions:
    You are more likely to buy a property at a reduced price at an auction, but the problem you may come across is getting agents to tell you the truth about the price. If you have a limit of $400,000 the agents may entice you to homes where the owners want $450,000. They do this by telling you that you might get the property for $420,000 if you bid.

    Some auction agents have no qualms at all about trying to force you to pay more than you can afford to pay at the auction. If you have to go over your limit and the sellers have to go under their price, most auctions and auctioneers won't mind because they are still getting a 'bumper' commission.

  • Someone always loses at auctions:
    One of the worst things about auctions is that all parties lose money. The seller will probably lose because they have had to sell their property too cheaply and the buyer, who does not conclude a deal, will miss out on the home because they have had to outlay money for inspections and legal advice, etc. There is always someone who will lose at an auction.

Copyright 2005

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